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Hi sir, is it okay to say that unsystematic risk can be measured by operating gearing and systematic risk can be measured by the beta factor?
Certainly the systematic risk is measured by the beta.
We do not measure the unsystematic risk, but the level of operating gearing is one factor (but only one factor) giving rise to the unsystematic risk. I give other examples of factors giving rise to unsystematic risk in my free lectures on this.
Yes sir, I’m aware of the other examples. I was only referring to the measurement of unsystematic risk. Thank you for the explanation 🙂
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